Favourites

Pensions minister Steve Webb has urged workers to blow the whistle on employers who put pressure on staff to opt out of a company pension.

Under new rules employers who do not offer staff a company pension will be forced to auto-enrol employees into the government’s National Employment Saving Trust (Nest) in a process that starts with larger firms later this year.

However, although employees will be automatically enrolled into Nest, they can opt out of saving through the government plan. This has led to fears that smaller employers, who may view the 3% contribution level as an unnecessary financial burden, will encourage staff to leave the scheme.

Webb said ‘there was an absolute commitment to policing small firms that push people to move out [of Nest]’ and the government would set up a whistleblowing scheme for employees to report companies that strong-arm staff into opting out.

‘There will be a whistleblowing scheme [set up for employees]…unfortunately we cannot be sure [employers] are not abusing [their position],’ he said.

‘We are doing something good [by auto-enrolling employees] but not everyone is going to play by the rules, however, that is not a reason for not doing it.’

Webb added that the Department for Work and Pensions would survey every person who opts out to find out the reasons behind it.

Although Webb would not give a specific figure on what the government considers a success rate for auto-enrolment, which will affect 10 million people, he said to get ‘five to eight million people saving for the first time would be fantastic’.

The whole attitude of Politicians making such inflamatory statements is anti business and anti employment. The very fact to receive an income of £26000 p.a. on benefits is equal to a salary of £35500 p.a pre tax tells you who the profligates in our society are. People would save if they were given proper incentives. The massive shift in income from Pension and other savers to those who are borrowing money is the biggest disincentive for not saving for a Pension than anything else, coupled to that even dividend income on a Pension is Taxed thanks to profligate Brown. Many of the Libs are in the same mold as Brown. Business will only work if it can make a profit, heaping even more costs on to it which will in the end produce very little for the employee,because of the meagre returns on investment. It is the Liberals only answer Blame somebody else. Britain used to have the biggest and best private Pensions in Europe provided by private enterprise. It was ruined by the Politicians either directly or indirectly through their folly.

After 20 years service your final salary pension goes up by 5% with 1 year's contribution (as 1 year is 5% of 20 years). If you were to leave your pension it would go up by RPI or CPI a rate of about 5% a year. If you don't get any pay rise or just a very small one and you contribute to your pension you would be better off leaving the pension scheme and letting it go up with inflation and investing the money you would have contributed into a new pension. This is a mathematical fact. If you have nearer 40 years service the problem gets worse if you have a sub-inflation pay rise. So sometimes it is best option to opt out of your pension scheme when you do the maths.

Another good example of why setting up a new small business in the UK is just not worth the bother. When are politicians going to learn!? I remember one bunch of clowns introducing a Selective Employment Tax ! Result: reduced job creation! People should be told to stand on their own two feet; it needs to start in the schools but I bet teaching unions wouldnt be comfortable with that. They are too busy brainwashing the kids about the benefits of a socialist economy. Well, the capitalists are tending to vote with their feet as I have pointed out recently somewhere else on this site.Who is going to finance the socialist utopia?

Pension schemes for people on basis rate tax are a fraud and governments should stop encouraging it. Why? because when the pensions are drawn they are taxed as income, NOT as a return of your own money. In this way governments get their tax "relief" back. In effect the tax relief is nothing more than a tax deferral and they have the cheek to impose all sorts of regulations and restrictions to their benefit in return for giving nothing. This NEST proposal is an extension of this and should be avoided at all cost.

Generally when you take your pension you are on a lower income than when you are working and contributing to a pension. This means that you will probably pay less percentage tax on the income from the pension than you would have from the contributions if you had simply taken them as wages. However, you will need a pension of about £12k before you would be better off than just letting the government totally support with income support if you had never made any contributions to any fund in your life. A lot of people will have very slightly above the limit where the government support stops so their entire life spent working and contributing to a pension leaves them only very slightly better off than someone who as never worked or contributed to anything.